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Friday, December 9, 2022
Stocks & Shares

Europe stock markets drop on concerns over economic slowdown

economic slowdown

The DAX futures contract in Germany traded 1.1% lower, CAC 40 futures in France dropped 0.9% and the FTSE 100 futures contract in the U.K. fell 0.5%

European stock markets are expected to open lower Friday, as rising bond yields reinforced expectations of an economic slowdown while U.K. political turmoil continued.

At 06:00 GMT, the DAX futures contract in Germany traded 1.1% lower, CAC 40 futures in France dropped 0.9% and the FTSE 100 futures contract in the U.K. fell 0.5%.

European equity markets are expected to follow the lead from the U.S. after the negative close on Wall Street Thursday and the losses in Asia overnight.

This followed U.S. Treasury yields rising to 14-year highs as the prospect of further aggressive interest rate hikes from the Federal Reserve, likely plunging the world’s dominant economy into recession, soured investor sentiment.

European bond yields have also climbed sharply higher Friday, including those associated with the benchmark 10-yr U.K. gilt as the political tumult in the U.K. continued with the resignation of Prime Minister Liz Truss after six chaotic weeks marred by policy shocks.

U.K. retail sales slumped 1.4% on the month in September, down 6.9% on an annual basis, as consumers reined in their discretionary spending in the face of the cost of living crisis given double-digit inflation and rising interest rates.

Market research firm GfK’s survey showed on Friday that U.K. consumers remain close to the gloomiest on record.

In corporate news, Renault said its quarterly sales rose to 9.8 billion euros ($9.57 billion), as price increases allowed the French car manufacturer to generate revenue growth despite a decrease in sales from the previous year.

Luxury eyewear maker EssilorLuxottica reported an 8% rise in third-quarter revenues, noting a rebound in sales in the Asia-Pacific region.

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